Kids at College: Does ISO’s Age Limitation Really Apply?

Is there really an age limitation in the homeowners' (HO) policy on kids away at college?

Here is the relevant definition of “insured" from the HO-3 05 11 edition:

5. "Insured" means:

a. You and residents of your household who are:

(1) Your relatives; or

(2) Other persons under the age of 21 and in your care or the care of a resident of your household who is your relative;

b. A student enrolled in school full-time, as defined by the school, who was a resident of your household before moving out to attend school, provided the student is under the age of:

(1) 24 and your relative; or

(2) 21 and in your care or the care of a resident of your household who is your relative; or

The key term on which to focus is "resident." Because "resident" is not defined in the form, it must be defined as it is used in daily language.

Based on the dictionary meaning of “resident," allow me to ask the original question again, is there really an age limitation on kids away at college? Paragraph 5.a.(1) states that an insured is a relative who is a resident of your household. Paragraph 5.b.(1) states that a student who WAS a resident before MOVING OUT to attend school is an "insured."

When I went to college, I did not move out of my parent's (my) home, I temporarily stayed in a dorm during the school year. My residency never changed, and I never moved out (well, I did when I graduated and got a job).

It appears the limitation in the wording is intended to limit insured status to adult children under 24 who actually move out and officially change residency to attend college. For example, a friend's daughter went away to college and leading up to her senior year she became an official resident of the state in which the college is located by changing her driver's license, her voting location, and etc. (all that is required to be a resident of a state). In this case, it seems the limitation would apply and insured status would end when she turns 24.

If a child is still living with his/her parents when he/she is 27 years old (their residency is with the parents) and he/she goes away to college and stays in the dorm (or even an apartment) but never changes his/her official residency, does this age limitation apply? They were a resident of the household; they didn't move out (just took the necessary clothes, towels and sheets necessary to live in the dorm), and they return to their parent's home (where their mail comes) every Christmas and summer - are they still a resident relative and still covered? Or do you think they have met all the requirements for the age limitation to apply? What could you convince a jury to believe?

ANSWERS:

I've taught since this language was added that the key phrase is “before moving out" and that, unless the child has no intention of returning home to reside indefinitely, he or she is maintaining dual residency. There's nothing in 5.a. that says the child can't be the resident of more than one household. Unless the child has forsaken residency with his or her parents, 5.b. hasn't kicked in. If they actually have moved out, there is a time limit on coverage.

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This is the way I teach it:

There are more than one or two things to consider regarding residency. In a situation where residency is being disputed, courts will look at various indicators:

Address on driver's license

Address used to file taxes

Location (city) of bank accounts

Voters registration

The fact that a student is renting an apartment is not necessarily an indicator that they are no longer a resident of the parent's household. Do they still have a room at home with their possessions? Do they still “come home" from time to time? Do they have a storage locker where they keep their “things" that they don't have with them, or are those things located in the parent's home?

One sure fire killer is when a student does whatever is necessary to become a “resident" of a state where their parents do not reside in order to obtain a lower “resident" tuition at the college. You can't have your cake and eat it too.

I think the intent of ISO is clear, that after leaving home for college, once they hit 24 they will no longer be considered residents. However, if you are 30 and still going to school, but your parent's home is still considered “home" by enough of the indicators above, then I vote they are still residents of the parent's household.

A similar situation is someone who joins the military. Unless they establish residency elsewhere, they could still be considered residents of the parent's home. I read a case of a 30-year career soldier who came home to his parents over Thanksgiving holidays, went hunting in the woods and had a hunting accident, shooting a third party. The court ruled that he was still a resident of the parent's household since he never married and never established another residence, even though he had been stationed and lived all over the US. He still had a room in his parent's home, his stuff was there, and he used that address to file his taxes. The parents HO liability had to pay.

So… I tell everyone it is going to be weighed on a case-by-case basis. Don't wait until something happens. Clarify (in writing) with your underwriter in advance.

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I would hate to split hairs after a loss. I think being a resident involves dwelling in, not where my mail is delivered. I don't have to worry about the definition if my child resided with me before going to school, is a full-time student, and is under age 24. At age 24 I can add the child as an additional insured. Since the carrier gets to define the term, I don't think I would rely on their magnanimity, although I might prevail in court.

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Yes, there is an argument that kids at college are covered as "residents of the household" even if they're part time students or age 24+. The courts have applied a number of tests for residency for kids at college. Do they still get financial support? Do they still maintain their parents address as their permanent residence? Is there still a close relationship? Do they return home regularly? Are they unmarried? etc.

But, when you ask insurers about it they'll invariably say that a.2 applies, restricting insured status to full time students under age 24. As an agent, I have to take their word for what their policy means.

I've looked for any case law resolving this and haven't seen any. When interpreting contracts, there's a principle of contract law that says when two different provisions of a contract apply, the more specific one governs.